Luxury car companies line up for big Indian EV race

Mercedes, BMW, Audi and Volvo are bullish on EVs even as they are priced higher than petrol and diesel vehicles, said the executives, adding that among other benefits buyers are enthused by a lower 5% goods and services tax (GST) on EVs and waiver of road registration tax in several states.

Some of the new EVs set to be launched in 2023 are Audi Q8 e-tron, Mini EV, Volvo EX90 and C40 Recharge, they said.

Electric luxury car sales accounted for 3.8% of total luxury car sales in December 2022, as against 0.9% in January last year, according to Jato Dynamics estimates. Luxury petrol sales saw a marginal decline in 2022, while diesel car sales remained stagnant.

Agencies

“Seeing the tremendous response for the EQB and the ‘Made in India’ EQS, we are very confident of a strong road map for our luxury EVs portfolio,” said Santosh Iyer, managing director, Mercedes Benz India, which retails three EVs in India – EQB, AMG EQS 53 and the locally made EQS 580.

Steps to Address Range Anxiety

“A combination of product attributes, adequate charging infra at homes, offices and ultra-fast charging network across dealerships for customers, battery warranties offered along with GST incentives is accelerating the adoption of luxury EVs,” said Iyer.However, the rate of adoption can only sustain with the current policies promoting EVs, which need to continue for the next eight to 10 years, he said. “Our EVs currently comprise less than 5% of our sales volume. We are confident that 25% of our overall sales in India in the next four years will comprise battery EVs only.”

BMW’s EV product range comprises sport utility vehicle iX, hatchback MINI SE, sedan i4 and limousine i7 as completely built units.

In 2022, BMW India sold 347 units of EVs. “By 2023, 90% of our segments will be covered by at least one BEV (battery EVs). The next milestone for 2023 is for 15% of our total sales to come from fully electric vehicles,” said Vikram Pawah, president, BMW Group India.

By 2030, BMW Group aims to sell 10 million BEVs, accounting for 50% of sales. Globally, the group more than doubled its BEV sales year-on-year in 2022, selling 215,755 fully electric BMW and MINI vehicles.With the easing of supply constraints, luxury car makers foresee better enquiries and sales. Some of the pent-up demand is being met now, said Jyoti Malhotra, managing director, Volvo Auto India. “The faster growth is due to the strengthening of consumer confidence in EVs on account of the higher distance coverage per charge that luxury EVs provide. The Volvo XC40 Recharge has a coverage of more than 400 kilometres per charge,” he said.To address range anxiety among EV owners, luxury car makers are installing fast chargers and giving a longer warranty on batteries. “We have installed more than 100 chargers in over 75 locations across the country, along with several projects in the pipeline,” said Balbir Singh Dhillon, head of Audi India.

As EV acceptance increases, Audi India is able to get higher allocations for the country from its German parent, said Singh.

BMW India has a network of fast chargers in 32 cities across the country, and it has opened the network to customers of other electric car brands as well.

Mercedes-Benz provides a complementary AC wall-box charger and sets up these chargers free of cost at customers’ home or office. The German car maker also provides an eight-year battery warranty for its EVs.

Volvo, which discontinued production of diesel cars in 2021, commenced supplies of XC40 Recharge in November 2022. The model accounted for 17% of its sales in November-December 2022.

“We are highly confident that our share of EVs is only going to increase in 2023,” said Malhotra of Volvo, which is currently undertaking a survey at customer locations to study the feasibility of installing solar charging.

The growth drivers for EVs are lower maintenance and operating costs, tax benefits, better range and more product offerings. Given the reliance of Indian luxury car makers on their global portfolios, it is only natural that they benefit and there is a smooth transition to EVs, said Ravi Bhatia, president, Jato Dynamics.